can my fiance collect sales tax without a tax id number or a dba?

Question

I was wondering if my fiance who is running his own construction business(without a dba) can collect sales tax? His brother said he needs a tax id number, but my mom never did she just had a dba, so i was wondering i fhe needs one or not inorder to collect something that we have to pay?

how can he go to jail for it when we filed last year with his own ss number and under a business but without a dba? this is the state of ny!!!

PLUS!!! my mother never had a separate tax id number she had a dba!!! and the state didn't say nothing about it when we filed this last year!!!

Answer 1

In NY, your fiance can collect sales tax without having a tax ID number by filing an ST-131 if it is a casual sale.

http://www.tax.state.ny.us/pdf/2007/st/st131_507.pdf

However, if he is going to be collecting sales tax on a regular basis, he must register his business as a sales tax vendor by filing DTF-17.

http://www.tax.state.ny.us/pdf/2007/fillin/st/dtf17_407_fill_in.pdf

Being a contractor, your fiance is also subject to various rules for sales tax. A contractor can to repairs (which are 100% subject to sales tax in NY) or capital improvements (the ccontractor does not collect sales tax, but must pay sales tax on the purchase price of materials used in that job). In order for your fiance to treat any job as a capital improvement, he MUST have a properly completed ST-124 for each job. Otherwise, he is required to collect sales tax.

http://www.tax.state.ny.us/pdf/2006/fillin/st/st124_506_fill_in.pdf

Also, your fiance must bill for sales tax upon the initial billing of the job and remit the tax with his quarterly (or monthly depending on how NYS sets him up) sales tax return. Quarterly sales tax returns end in the following months: February, May, August, and November. The tax returns are due 20 days later (March 20, June 20, September 20, and December 20).

If your fiance does a taxable repair (replacing glass in a window for example), he can claim a credit on his tax return for the tax paid on the cost of the materials actually transferred to the new owner (in this case the glass).

Answer 2

You are confusing sales taxes and income taxes. A business owner often has to deal with both, but they are totally separate.

He needs a state sales tax ID or number to legally collect and render sales taxes. The "dba" is not a requirement.

If your mom collected sales tax without a tax number, she was breaking the law. Most likely she did have one and you just didn't know about it.

Answer 3

First, it is never a question of if he CAN collect sales tax. Either he is REQUIRED to collect sales tax or he is PROHIBITED form collecting sales tax. For record keeping purposes, everyone required to collect sales tax must have a STATE tax ID number. This is different than a Federal tax ID number. Unless you have employees, your social security number IS your Federal tax ID number. A DBA (business name) is not related to either.

Answer 4

I'm not sure about NY but in CA you either can get a tax id number OR use your social security number. I think the advantage to getting a tax id number is if anything should happen everything would be separate and not interfere with his social security br retirement benefits.

Also he might want to change his business to a LLC and that way he isn't fully finacially responsible if the business goes under.

Answer 5

Yes he can apply for a state sales tax number using his name and SS number. A Federal tax ID is only needed if he has employees or the business is a partnership or corporation. Using a DBA is optional for sales tax and business purposes.

Answer 6

Most states require that you be registered with their sales tax divisions in order to collect sales taxes. That is the way they track how much you should be collecting and whether or not you have sent it on to them.

Answer 7

Yes he can... and he can go to jail too... THAT IS FRAUD and the state will really thump on him for it.

Answer 8

Yes ... he should use his social security number...